[28 Pa.B. 366]
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NONBUSINESS EXEMPTIONS § 32.21. Charitable, volunteer firemen's and religious organizations, and nonprofit educational institutions.
(a) Definition. The following term, when used in this section, has the following meaning, unless the context clearly indicates otherwise:
Isolated sales--Sales of taxable property or services which:
(i) Occur no more than three times nor for more than a total of 7 days in a calendar year.
(ii) Are not made from a location at which other businesses are making sales of similar property or services upon which tax is required to be collected.
[(a)](b) * * *
* * * * * [(b)](c) * * *
* * * * * [(c)](d) Sales by exempt organizations.
* * * * * (2) Isolated [sale] sales.
(i) An exempt organization need not collect and remit tax upon the sale of property in an isolated sale [as defined in § 32.1 (relating to definitions)].
(ii) The following are examples of nontaxable and taxable sales by an exempt organization:
(A) ''E'', an exempt organization, sells stadium cushions to the public on three separate Saturdays during a calendar year from a location at which no other organizations or businesses are selling similar items. ''E'' makes no other taxable sales during the calendar year. ''E'' would not be required to collect sales tax on its sales of stadium cushions.
(B) ''E'', an exempt organization, sells spaghetti dinners every Sunday afternoon. The dinners are consumed on the premises. All sales of spaghetti dinners by ''E'' are subject to tax because ''E'' makes taxable sales more than three times in a calendar year.
(3) Food and beverages. An exempt organization [which is either] engaged in the business of catering or [the operation of] operating a restaurant, cafe, lunch counter or other eating [place] establishment for the purpose of selling prepared food or beverages is required to obtain a sales tax license number and collect and remit tax upon its sales of food or beverages unless the [sales] sale of food or beverages:
(i) Qualifies as an isolated sale [as defined by § 32.1.].
* * * * * (4) Purchases of property for resale. An exempt organization purchasing property for resale in connection with fundraising activities is required to hold a Pennsylvania [sales tax] Sales Tax license number for the purpose of collecting tax, unless the sale qualifies as an isolated sale [as defined in § 32.1].
* * * * * § 32.22. Sales to the United States Government or within areas subject to the jurisdiction of the Federal Government.
(a) Sales to the United States Government. Sales of tangible personal property or services to the [Government of the] United States Government are not subject to tax under the [act] TRC. Tax need not be collected on the sales to a [regular department] governmental agency, such as Defense, Interior, Agriculture,[ Post Office,] Commerce of the United States. [Reference should be made to § 32.2 (relating to exemption certificates).] Sales of tangible personal property to the United States Postal Service shall be considered sales to the United States Government. Federal Reserve Banks and their branch banks are exempt from the payment of [sales and use taxes] Sales and Use Tax under the [act] TRC. Reference should also be made to section 7 of the Federal Reserve Act (12 U.S.C.A. § 290). However, commercial banks which are merely member banks of the Federal Reserve System are subject to sales and use tax. The only banks in [the] this Commonwealth entitled to this exemption are the Federal Reserve Bank of Philadelphia, District No. 3, and the Pittsburgh Branch of the Federal Reserve Bank of Cleveland, District No. 4.
(b) Construction contracts. The sale to or use of tangible personal property by construction contractors in the construction, reconstruction, remodeling, repair and maintenance of real estate, including buildings, roads, structures and bridges, for or on behalf of the United States Government, is subject to tax. However, the sale to or use of building maintenance services by the United States Government is not subject to tax.
[(b)] (c) Nonexempt agencies. Nonexempt agencies include National Banks, Federal Savings and Loan Associations, Joint Stock Land Banks[,] and National Park Concessionaires [, The Atomic Energy Commission, Federal licensees such as warehouses and stockyards, and construction contractors engaged in the improvement of real estate such as buildings, roads, structures, bridges owned by an exempt Federal agency, and similar corporations, companies, institutions or persons may not be exempt].
[(c)](d) * * *
BUSINESS EXEMPTIONS § 32.31. Dairying.
(a) Equipment, machinery, parts and foundations therefor and supplies used directly in dairying. The purchase or use of tangible personal property or services performed thereon by a person engaged in the business of dairying [shall be] is exempt from tax if the property is predominantly used directly [by him] in dairying operations. Purchases of vehicles required to be registered under 75 Pa.C.S. §§ 101--[9821] 9805 (relating to the Vehicle Code) as well as supplies and repair parts for the vehicles are subject to tax. There is no exemption for maintenance facilities or for materials or supplies to be used or consumed in [a] construction, reconstruction, remodeling, repair or maintenance of real estate other than machinery, equipment or parts therefor that may be affixed to the real estate. [Beginning March 4, 1971, foundations for equipment and machinery became subject to tax and remained taxable until February 9, 1981. Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in dairying [shall be] are exempt from tax.
* * * * * (2) Property directly used; predominant use. The purchase or use by a dairyman of property in the following categories, when predominately used directly in dairying, [shall be] is exempt from tax. [Where] If a single unit of the property is put to use in two different activities, one of which is a direct use and the other of which is not, the property may not be exempt from tax unless the dairyman makes use of the property more than 50% of the time directly in dairying operations.
* * * * * (vi) Disinfecting or pest control services.
(3) Property or services not directly used. Property or services in the following categories [is] are not directly used in dairying operations, and the purchase or use of the property or services [shall be] is subject to tax.
* * * * * (ii) Maintenance facilities. Maintenance, service and repair work is not a dairying operation. Maintenance facilities, including tools, equipment and supplies predominantly used in performing the work [.For], for example: chain hoists, tire spreaders, welding equipment, drills, sanders, wrenches, paint brushes and sprayers, oilers, absorbent compounds, dusting compounds, air blowers and wipers[) shall be], are subject to tax. However, replacement parts [which] that are used to replace worn parts upon exempt machinery and equipment [(For], for example: motors, belts, screws, bolts or gears[)], and operating supplies [which] that are [actively and continuously] directly used in the operation of exempt machinery and equipment [(For], for example: fuel, lubricants, paint and compressed air[) shall be], are also exempt from the tax. Equipment and supplies, including soaps and cleaning compounds, brushes, brooms, mops[,] and similar items, used in general cleaning and maintenance of dairy property [shall be] are subject to tax.
* * * * * (iv) Selected services. The following services are not directly used in dairying and are subject to tax:
(A) Building maintenance or building cleaning services.
(B) Lawn care services.
(C) Help supply services.
(D) Employment agency services.
(E) Lobbying services.
(F) Secretarial and editing services.
(G) Adjustment and collection services.
(H) Credit reporting services.
(I) Self-storage services.
* * * * * § 32.32. Manufacturing; processing.
(a) Equipment, machinery, parts and foundations therefor and supplies used directly in manufacturing or processing. The purchase or use of tangible personal property or services performed thereon by a person engaged in the business of manufacturing or processing is exempt from tax if the property is predominantly used directly by him in manufacturing or processing operations. Purchases of vehicles required to be registered under 75 Pa.C.S. §§ 101--[9821] 9805 (relating to the Vehicle Code) as well as supplies and repair parts for the vehicles [shall be] are subject to tax. There is no exemption for maintenance facilities or for materials or supplies to be used or consumed in construction, reconstruction, remodeling, repair or maintenance of real estate other than machinery, equipment or parts therefor that may be affixed to the real estate. [Beginning March 4, 1971, foundations for equipment and machinery became subject to tax and remained taxable until February 9, 1981. Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in manufacturing or processing [shall be] are exempt from tax.
* * * * * (3) Property or services not directly used. Property or services in the following categories [is] are not directly used in manufacturing or processing operations and the purchase or use of the property [shall be] or services are subject to tax.
* * * * * (iv) Selected services. The following services are not directly used in manufacturing or processing and are subject to tax:
(A) Building maintenance or building cleaning services.
(B) Lawn care services.
(C) Disinfecting or pest control services.
(D) Help supply services.
(E) Employment agency services.
(F) Lobbying services.
(G) Secretarial and editing services.
(H) Adjustment and collection services.
(I) Credit reporting services.
(J) Self-storage services.
* * * * * § 32.33. Farming.
(a) Equipment, machinery, parts and foundations therefor and supplies used directly in farming. The purchase or use of tangible personal property or services performed thereon by a person engaged in the business of farming is exempt from tax if the property is predominantly used directly by him in farming operations. Purchases of vehicles required to be registered under 75 Pa.C.S. §§ 101--[9821] 9805 (relating to the Vehicle Code) as well as supplies and repair parts for the vehicles are subject to tax. There [shall be] is no exemption for maintenance facilities or tools, materials or supplies which are used or consumed in the construction, reconstruction, remodeling, repair or maintenance of real estate or farm equipment. [Beginning March 4, 1971, foundations for equipment and machinery became subject to tax and remained taxable until February 9, 1981. Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in farming [shall be] are exempt from tax.
* * * * * (2) Property directly used; predominant use. The purchase or use by a farmer of property in the following categories, when predominantly used directly in farming, is exempt from tax. When a single unit of the property is put to use by a farmer in two different activities, one of which is a direct use and the other of which is not, the property is not exempt from tax unless the farmer makes use of the property more than 50% of the time directly in farming operations.
* * * * * (iv) Packaging; preserving. Wrapping equipment and supplies, including internal packing materials and returnable containers, used in packaging which passes to the ultimate consumer are directly used and therefore exempt. Property used to handle and preserve farm products upon the farm premises, and to prevent or deter the destruction, injury or spoilage of farm products, or productive animals or plants, is exempt from tax. Examples of [such] this property include the following:
* * * * * (F) Disinfecting or pest control services.
* * * * * (3) Property or services not directly used. Property or services in the following categories [is] are not used directly in a farming operation and the purchase or use of the property [shall be] or services are subject to tax.
* * * * * (iv) Selected services. The following services are not directly used in farming and are subject to tax:
(A) Building maintenance or building cleaning services.
(B) Lawn care services.
(C) Help supply services.
(D) Employment agency services.
(E) Lobbying services.
(F) Secretarial and editing services.
(G) Adjustment and collection services.
(H) Credit reporting services.
(I) Self-storage services.
* * * * * § 32.34. Public utilities.
(a) Equipment, machinery, parts and foundations therefor, and supplies used directly in rendering public utility service. The purchase or use by a public utility of tangible personal property or services performed thereon to be predominantly used directly by it in producing, delivering or rendering of a public utility service or constructing, reconstructing, remodeling, repairing or maintaining facilities directly used in the service is exempt from tax, whether or not the facilities constitute real estate. [However, for purposes of this exemption, real estate does not include buildings, roads or similar facilities. Effective March 4, 1971, foundations for exempt machinery or equipment became subject to tax and remained taxable until February 9, 1981. Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in rendering a public utility service are exempt from tax. The term ''foundations'' includes sand, gravel, crushed rock, concrete or similar material used as bedding or surrounding pipe used directly in rendering a public utility sanitary sewer or water service. [Purchases of any vehicles] The purchase of a vehicle required to be registered under 75 Pa.C.S. §§ 101--[9909] 9805 (relating to the Vehicle Code), except those vehicles used directly by a public utility engaged in business as a common carrier as well as supplies and repair parts for the vehicles, is subject to tax.
* * * * * (3) Property or services not directly used. Property or services in the following categories [is] are not directly used in public utility operations and the purchase or use of the property or services is subject to tax.
* * * * * (iv) Selected services. The following services are not directly used in public utility operations and are subject to tax:
(A) Building maintenance or building cleaning services.
(B) Lawn care services.
(C) Disinfecting or pest control services.
(D) Help supply services.
(E) Employment agency services.
(F) Lobbying services.
(G) Secretarial and editing services.
(H) Adjustment and collection services.
(I) Credit reporting services.
(J) Self-storage services.
* * * * * § 32.35. Mining.
(a) Equipment, machinery, parts and foundations therefor and supplies used directly in mining. The purchase or use of tangible personal property or services performed thereon by a person engaged in the business of mining is exempt from tax if the property is predominantly used directly by the person in mining operations. Purchases of a vehicle required to be registered under 75 Pa.C.S. §§ 101--[9909] 9805 (relating to the Vehicle Code), as well as supplies and repair parts for the vehicles [is] are subject to tax. There is no exemption for maintenance facilities or for materials or supplies to be used or consumed in construction, reconstruction or remodeling of real estate other than machinery, equipment and parts therefor that may be affixed to the real estate. [Beginning March 4, 1971, foundations for equipment and machinery became subject to tax and remained taxable until February 9, 1981. Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in mining are exempt from tax.
* * * * * (3) Property or services not directly used. Property or services in the following categories [is] are not used directly in mining operation, and the purchase or use of the property or services is subject to tax.
* * * * * (iv) Selected services. The following services are not directly used in mining and are subject to tax:
(A) Building maintenance or building cleaning services.
(B) Lawn care services.
(C) Disinfecting or pest control services.
(D) Help supply services.
(E) Employment agency services.
(F) Lobbying services.
(G) Secretarial and editing services.
(H) Adjustment and collection services.
(I) Credit reporting services.
(J) Self-storage services.
* * * * * § 32.36. Printing and related businesses.
(a) [The printing] Printing exemption. Printing and related businesses are exempt from sales and use taxes in accordance with the following:
(1) Machinery[,]; equipment[,]; parts; foundations for machinery, equipment and parts; and supplies used directly in printing. Printing, when engaged in as a business, is included in manufacturing under the TRC and regulations applicable to manufacturers are also applicable to printers. Equipment, or machinery[--], including components of a computer system, accessories, parts and supplies therefor [which are] used predominantly and directly in the business of printing, regardless of the technology involved, is exempt from tax. [Where] If equipment is used for both exempt and nonexempt purposes, the predominant use test shall determine its tax status. [Effective February 7, 1981, foundations] Foundations used to support equipment, machinery and parts used directly in printing are exempt from tax. See § 32.32 (relating to manufacturing; processing). [With the exception of purchases involving improvements to real estate, directly used property] Property directly used in printing/manufacturing may be purchased free of tax upon the presentation to a vendor of a properly executed exemption certificate [certifying that the purchase will be directly used in printing--manufacturing]. For example, company X has a computer printer and photocopy machine [which] that predominantly [supports] support administrative operations. Neither device qualifies for the printing exemption. Company Y [has] operates a print shop [operated as a separate profit-center reproducing] that reproduces multiple copies of substantially identical printed matter. The tangible personal property in this print shop [which is] predominantly used in printing qualifies for the sales tax exemption.
* * * * * (b) Property or services not directly used. Property and services described in § 32.32(a)(3)(relating to manufacturing; processing) are not directly used in printing operations and the purchase or use of the property or services is subject to tax.
[(b)](c) * * *
* * * * * § 32.37. Photographers and photofinishers.
* * * * * (b) Manufacturing exemption. The purchase or use of materials, equipment and supplies by a photographer or photofinisher is exempt from tax if the property is predominantly used directly [by him] in the photography or photofinishing operation. This exemption is restricted to photographers and photo-finishers and is not available to photo-refinishers.
* * * * * (2) Property or services not directly used.
(i) Property and services described in § 32.32(a)(3) (relating to manufacturing; processing) are not directly used in photography and photofinishing operations and the purchase or use of the property or services is subject to tax.
(ii) The following are examples of equipment, materials and supplies [which] that do not qualify for the manufacturing exemption: camera cases, gadget bags, lens cases, projectors, screens, projection lamps, projection tables, stands, slide files, motion picture reels and cans, viewers, viewing tables, negative files, negative envelopes, bulk film loaders, film cassettes, paper safes and cleaners for film and lenses.
* * * * *
CHAPTER 33. COMPUTATION OF TAX § 33.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Credit [sales] sale--[Sales] A sale in which the purchaser pays all or part of the total purchase price subsequent to the [time] date of purchase. [A sale shall be deemed to be on credit whether by open credit--including the use of a credit card--or a secured transaction such as a chattel mortgage, conditional sale or bailment lease.] The term does not include a lease, a bailment lease, a conditional sale or an installment sale.
* * * * * Purchase price--The total value of anything paid or delivered or promised to be paid or delivered, whether it be money or otherwise, in consideration of a sale at retail or purchase at retail not including a rental or license to use. See § 31.4 (relating to rentals or leases of tangible personal property). The term does not include separately stated employe costs related to the provision of interior office building cleaning services, help supply services or employment agency services. See §§ 60.1, 60.4 and 60.5 (relating to building maintenance or building cleaning services; help supply services; and employment agency services).
Sale--A transaction in which the seller transfers ownership of tangible personal property to a purchaser for a purchase price.
§ 33.2. [Scope] Purchase price.
* * * * * (b) Exclusions. Amounts which are excluded from the taxable portion of purchase price, if separately stated and identified, include:
* * * * * (5) Gratuity. A voluntary payment by the purchaser or a reasonable mandatory charge by the vendor in lieu of the voluntary payment, which is billed to the purchaser and distributed directly to the vendor's employes for services rendered in connection with the purchase of food or beverages or hotel or motel accommodations.
(6) Retail excise taxes. Excise taxes such as local sales tax, public transportation assistance tax and vehicle rental tax imposed upon the purchase price and paid by the purchaser.
* * * * * § 33.4. Credit and lay-away sales.
(a) Tax collection for credit sales. If a sale, with respect to which a tax is required to be collected, is wholly or partly on credit, the seller shall require the purchaser to pay the full amount of the tax due on the entire purchase price at the time the purchase is made or within 30 days thereafter. The failure of the purchaser to remit the tax due to the seller does not relieve the seller of the obligation [of reporting] to report the sale and [paying] pay to the Commonwealth the tax [he should have collected] due. The tax shall be remitted by the seller with the tax return covering the period in which either the [purchase] sale was made or the tax [was or] should have been collected.
Examples:
(1) ''S'' seller makes a cash sale of taxable property on May 10. ''S'' collects the applicable tax at the time of the sale. ''S'' is required to remit the tax with the tax return for the month of May because the tax was collected at the time of sale.
(2) ''S'' seller makes a credit sale of taxable property on May 10. ''S'' collects the applicable tax on June 10. ''S'' is required to remit the tax with the tax return for the month of May which is due June 20.
(3) ''S'' seller makes a credit sale of taxable property on May 22. ''S'' collects the tax on July 31. ''S'' is required to remit the tax with the return for the month of June because ''S'' is required to remit the tax within 30 days of the date of sale.
* * * * *
CHAPTER 34. REGISTRATION, RECORDKEEPING AND RETURNS § 34.4. Direct payment permit.
* * * * * (b) Requirements. To receive a Direct Payment Permit, the following requirements shall be met by the taxpayer:
* * * * * (5) Direct Payment Permit holders are required, as a condition of the issuance of the permission, to provide the Department access to the records, including electronic tapes or disks, maintained to account for the tax due.
(6) The taxpayer shall be licensed or registered at the time of applying for a Direct Payment Permit and shall maintain the license or registration during the period in which it holds a Direct Payment Permit number.
* * * * * (e) General restrictions upon use of Direct Payment Permit. A Direct Payment Permit may never be used in conjunction with the following transactions:
* * * * * (2) Purchase of prepared food or beverages at an eating place or from a caterer.
* * * * *
CHAPTER 42. BROADCASTING § 42.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Licensed commercial or educational station--A broadcasting station operating under one of the following Federal Communications Commission licenses is a licensed commercial or educational station:
* * * * * (v) Cable television company.
§ 42.3. Property.
(a) Property directly used. The following are examples of equipment, parts and accessories, and materials and supplies which, when predominantly used directly by a licensed commercial or educational station in the process of broadcasting are exempt from tax. This exemption applies even though the equipment is part of a mobile unit.
* * * * * (2) Transmitter or receiver equipment, including technical equipment located at transmitter or receiver sites.
* * * * * (7) Cable television distribution system equipment, including video switching equipment, modulators, combiners, amplifiers, cable, converter boxes and similar items.
* * * * *
CHAPTER 44. FARMING AND DAIRYING § 44.2. Cooperative agricultural associations.
* * * * * (b) Sales and use tax exemption. Cooperative agriculture associations which are required to pay corporate net income tax under the provisions of the Cooperative Agriculture Association Corporate Net Income Tax Act (72 P. S. §§ 3420-21--3420-30) are exempt from the payment of sales and use tax on their purchases of tangible personal property and services. The exemption does not apply to the purchase, lease, repair or maintenance service of any motor vehicle required to be registered under 75 Pa.C.S. §§ 101--[9910] 9805 (relating to the Vehicle Code). The exemption does not inure to a construction contractor who, under a construction contract with a cooperative agriculture association, is required to purchase materials, supplies or equipment which are installed so as to become part of the real estate under a construction contract.
* * * * *
CHAPTER 45. PUBLIC UTILITIES § 45.1. Exemption of electric cooperative corporations.
Corporations formed under 15 Pa.C.S. §§ 7301--7359 (relating to the Electric Cooperative Law of 1990) are by reason of 15 Pa.C.S. § 7333 (relating to license fee; exemption from excise taxes) exempt from the payment of [sales and use tax] Sales and Use Tax upon their purchase of tangible personal property and services under [the provisions of] Article II of the TRC (72 P. S. §§ 7201--7282). The corporations shall furnish their vendors with an exemption certificate setting forth that they are corporations formed under the Electric Cooperative Corporation Act and that they are therefore exempt from the [sales and use tax] Sales and Use Tax imposed by that act on purchases of property to be used in the activities of the corporations.
CHAPTER 46. CONSTRUCTION CONTRACTORS § 46.9. Financial institution security equipment.
* * * * * (b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:
Building maintenance services--The performance of routine and periodic services upon a building to keep the building in a satisfactory operating condition. The term includes cleaning, oiling, greasing and replacing parts. The term does not include building repair services.
Building repair services--Services to a building that do not qualify as building maintenance or building cleaning services.
* * * * * (e) [Maintenance] Repair and maintenance. [Maintenance] Repair and maintenance shall conform [with] to the following:
(1) Repair.
(i) [Maintenance] Repair of installed security equipment on the premises in which it is installed, or maintenance of installed security equipment by a person who removes it from the premises for the work and later reinstalls it, is a construction contract. As a construction contract, the work is a nontaxable service to real estate, and the person performing the service may not charge tax to [his customer upon the contract price] the purchaser. Rather, the person performing the service is responsible for the payment of tax upon the purchase price of any part or other tangible personal property [which is] transferred to the customer in the course of performing the service.
[(2)](ii) [Maintenance] Repair of security equipment [which] that is the subject of a straight sale because it does not require installation as defined in subsection (b), or maintenance of installed security equipment [which] that is removed by the owner or a designee and taken to the service premises, is a taxable service to tangible personal property. The person rendering the service shall register with the Department and collect tax upon both the labor charge and the charge for any part or other tangible personal property which is transferred to the customer in the course of the service. The resale exemption from tax is available to the serviceman upon the purchase of property which is to be transferred.
(2) Maintenance.
(i) Maintenance of installed security equipment on the premises in which it is installed, or maintenance of installed security equipment by a person who removes it from the premises for the work and later reinstalls it, is a building cleaning and maintenance service. As a building cleaning and maintenance service, the charges are subject to tax. The person performing the service is entitled to claim the resale exemption upon the purchase of any tangible personal property or services transferred to the purchaser in connection with the performance of the building cleaning and maintenance service.
(ii) Maintenance of security equipment which is the subject of a straight sale because it does not require installation as defined in subsection (b), or maintenance of installed security equipment which is removed by the owner or a designee and taken to the service premises, is a taxable service to tangible personal property. The person rendering the service shall register with the Department and collect tax upon both the labor charge and the charge for any part or other tangible personal property which is transferred to the customer in the course of the service. The resale exemption from tax is available to the serviceman upon the purchase of property which is to be transferred.
* * * * *
CHAPTER 47. RENTALS § 47.18. Totalizator equipment.
(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:
* * * * * [Resident--A natural person, partnership, corporation, association or other entity which is domiciled, maintains a place of business or is authorized to do business in this Commonwealth.]
Totalizator company--A business providing [electronic totalizator equipment to a corporation] computerized pari-mutuel services.
(b) Scope. A totalizator company shall conform with the following:
(1) Charges to a racing corporation. A totalizator company which provides [electronic totalizator equipment] a computer service to a racing corporation in connection with parimutuel betting is deemed to be rendering a nontaxable service. [Therefore, charges] A charge made by the totalizator company to a racing corporation in connection with rendering its nontaxable computer service is exempt from [sales and use taxes] Sales and Use Tax.
(2) Purchases by a resident totalizator company. A totalizator company is considered to be the consumer of equipment, materials or supplies, and services thereto, which it uses in the rendition of its nontaxable computer service. Accordingly, a totalizator company shall pay [sales or use tax of] this Sales and Use Tax to the Commonwealth in accordance with this subsection:
* * * * *
CHAPTER 58. MISCELLANEOUS § 58.13. Carpeting and other floor coverings.
(a) [General. This section pertains to the sale and/or installation of carpeting, tile, linoleum and other similar floor coverings. This ruling is intended to amplify the provisions of § 31.16 (relating to contractors acting as agents for their exempt customers).
(b)] Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:
* * * * * [(c)] (b) Straight sales. A straight sale of floor covering is a taxable sale of tangible personal property under the [sales tax] Sales Tax law. Dealers making [taxable] straight sales of floor covering are required to be licensed with the Department and collect and remit [sales tax] Sales Tax upon the total purchase price, as defined in subsection [(b)] (a), unless the purchaser submits a properly executed exemption certificate or other documentary evidence establishing that the transaction is exempt. See subsection (h). The amount representing the purchase price of a taxable ''straight sale'' is reported on the taxable sale line of the dealer's regular [sales tax] Sales Tax return (Form PA-3).
[(d)] (c) Construction contracts. A construction contract does not constitute a taxable sale of tangible personal property. Charges for the sale and installation of floor covering (construction contract) are not subject to tax. The dealer making the construction contract is not exempt from tax. He is considered to be the consumer of property which he uses or transfers in the performance of the ''construction contract'' and is liable for the payment of the applicable tax. The tax which the dealer is required to pay is based upon his purchase price, as defined in subsection [(b)] (a), of property used, consumed or transferred in the performance of the construction contract. The tax may be paid by utilizing one of two procedures [set forth at] in subsection (g). The amount repre senting a construction contract is reported at the nontaxable sales line of the dealer's regular sales tax return (Form PA-3).
[(e)] (d) Repairing of floor covering. Repairing of floor covering shall conform with the following:
* * * * * (e) Cleaning of floor covering. Persons who provide the service of cleaning floor covering, whether or not the floor covering is removed from the place where it is located, are performing a taxable building cleaning service and are required to collect [sales tax] Sales Tax upon the purchase price, unless the purchaser qualifies for exemption under subsection (h).
(f) Subcontractors' charges for installing floor covering. A subcontractor's charges for floor covering installation services, as defined in subsection [(b)] (a), are not subject to sales tax as a separately stated item on the customer's invoice, since a subcontract to perform the services falls within the definition of a ''construction contract.''
* * * * * (h) Exemptions. Exemptions shall conform with the following:
* * * * * (2) Straight sales. Straight sales shall conform with the following:
* * * * * (ii) A dealer shall be required to collect the applicable [sales tax] Sales Tax upon the straight sale of floor covering and related materials to the following organizations or institutions where the floor covering and related materials are of the type which require installation as that term is defined in subsection [(b)] (a).
* * * * *
[Pa.B. Doc. No. 98-123. Filed for public inspection January 23, 1998, 9:00 a.m.]
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